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Wednesday, December 17, 2014

The
end of last year was too early to make judgments about Tony Abbott and
his government, but by now we can make a reasonable assessment. And it's
hardly a favourable one, even by those who couldn't wait to see the
back of infighting Labor.

But though it's easy to bang on about the
Abbott government's failings, I'm beginning to think it's too easy.
Maybe our politicians are an uninspiring lot because their citizens
aren't much better.

My strongest feeling in recent days is what a
mentally incestuous, intellectual backwater we've allowed Australia to
become, even in an age of instant access to the newest and best ideas.

It's
all there to enlighten and guide us into better paths, but few of us
seem to be taking it in - not our politicians, our bureaucrats, our
media commentators, maybe not even our academics. Just a few of our
think-tanks - most notably, the Grattan Institute.

The future is
pregnant with exciting possibilities, but we sweat the small stuff and
keep chasing the same tired old reform ideas round and round the track.

Monday's
midyear budget review was a depressing reminder that this government or
the next is likely be wrestling to get the budget back to surplus for
up to a decade.

Can you imagine how much effort and attention from
our politicians, econocrats and media this will consume? This year's
argument played out every year for many years?

And for what? To
get the budget back to balance. I'm not saying balancing the budget is
unimportant; of course it's important. But it's just housekeeping. It
has to be done, but once it has been it's just the avoidance of a
problem.

It doesn't achieve anything positive. And yet we're
hoping that, sometime within the next decade, we'll be able to list it
as one of our great achievements.

So bogged down and obsessed by
the budget has our elite become that, in all our fiddling with
government spending and taxation, an attitude is developing - especially
in the purse-string departments - that it doesn't much matter what
measures we take so long as they reduce the deficit.

This is
impoverished, desperation thinking. We ought to be choosing budget
measures that kill two birds with one stone; that improve the
government's efficiency or the economy's efficiency or the fairness of
our tax-and-transfer system - or even, dare I say it, improve the
quality of our lives - as well as cutting the deficit.

But when
you look at this year's budget you see little sign of such broader
thinking. Take the way successive governments have imposed Orwellian
"efficiency dividends" on government departments and agencies, which by now actually sets off another round of compulsory redundancies.

Such
savings draw approval rather than complaint from a shiny-bums hating
public, but the notion that so many jobs can be cut without impairing
the public service's ability to do its job - and to give the government
high quality advice - is crazy.

Staff cuts in the Taxation Office
are one reason tax collections have fallen short. Staff cuts in Treasury
and Finance are one reason the budget was so bad. And why do you think
the Bureau of Statistics is having so much trouble telling us what's
happening to unemployment?

We're indebted to a think-tank - not
the econocrats - for reminding us how unequal the distribution of wealth
between the generations has become. To a fair extent this arises from
longstanding and increasing discrimination between the generations in
the government's tax and spending policies.

Did the budget seize
the opportunity to fashion its savings in ways that reduced this
problem? Did anyone even think to assess the proposed savings from the
perspective of their effect on this imbalance? What do you think?

Similarly,
we're indebted to the Grattan Institute for bringing to us relatively
new research showing how important the efficient functioning of big
cities is to the efficiency of the economy and to promoting economic
growth.

To boil it down, a key issue is how long it takes people
to get from their home to work. Did it occur to anyone to suggest to the
government that this efficiency consideration should affect its choice
of state infrastructure projects to fund?

Then there's all the
orthodoxy-busting research - now coming even from the official
international economic agencies - finding that that income inequality
acts as a drag on economic growth. Did the government know - or did
anyone warn it - that by preferring budget cuts biased against the
bottom half it could be hindering its professed goal of faster growth?

In
any time remaining after it has struggled with the budget, the
government plans reviews of the tax system and industrial relations,
leading to major proposals to reform the economy and get it growing
faster.

Really? One more time? That's the best advance you've been
able to think of? That's the best the whole nation has come up with?
Another argument about the GST? Another argument about bringing back
Work Choices?

The tax system will always need running repairs, but for
so many of us to see tax reform as the Stairway to Heaven is delusional.
Same goes for another fiddle with wage bargaining.

It reveals the
limits to our ambition, the incestuous nature of our policy debate, the
limits to our imagination and even the limits to our use of Amazon.